What does it take to build a strategic board? And how do you decide who takes a seat?
Johnson, who most recently worked to place a board member with an early stage privately backed natural foods company, encourages companies to first determine what type of board they want to build as no two boards are the same.
“If you’re in the early stages of growth, you will want to have a board member who knows how to scale a business from sub $10M to $100M in annual revenue,” Johnson said.
Companies should also focus on building boards with diverse members who bring fundamental industry knowledge and experience to the organization.
“When you’re a business that generates more than $10M in annual revenue, at least two to three of your board seats are likely going to be held by investors so you want to fill the remaining seats with people who have actual diversity in experiences,” Johnson said. “Effective boards will have members from the brand side who know how to scale a business.”
So what makes a candidate board member material?
While it’s not uncommon for companies to onboard someone who has lengthy experience serving on multiple boards, it’s important for brands to seek out people who are still actively working in the industry.
“Most companies want someone who has experience working with high growth brands,” Johnson said. “Otherwise the company may feel that they are lacking expertise.”
If finding a candidate with this experience proves too difficult, it’s important to look for other equivalent career successes.
“They have to have multiple wins on their résumé,” Johnson said about what makes a potential candidate board member material. “If someone has the proven ability to build an early stage brand to the next stage of growth, then they are in the running for consideration on a board.”
When it comes to building a better board, big-picture thinking is key.
“Find someone who is involved in the day-to-day operations of the business and is able to look at the industry as a whole.”
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